Reliance came out with its Q2 results today. Susanta Mazumdar of UBS says that the company's numbers are almost in line with UBS's expectations. He also says that the petrochemical division of the company did very well in this quarter, in comparison to the refining division.
On Reliance's refining and petrochemical side's performance in Q2.
Reliance came out with its Q2 results today. Susanta Mazumdar of UBS says that Reliance's numbers are almost in line with UBS's expectations. Mazumdar adds that he has a price target of Rs 925 on Reliance at present.
"I think that Reliance's numbers are fine, and it is almost in line with our estimates. The only issue being that the interest cost is slightly lower than our the expectations," he said.
Mazumdar believes that the petro-chemical numbers of the company are looking higher, whereas refining profit of Reliance is slightly below expectations.
"Refinery volumes were almost flat, which we thought will be slightly higher. Last quarter, a big inventory gain was there, which pushed up the refining margin by almost USD11. That is why refinery contributed close to Rs 18 billion last quarter," he said.
"Again in this quarter, it contributed around Rs 15.3 billion. The refining margin as such was higher," he adds.
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Mazumdar mentions that during the last quarter, the refining margin of Reliance was almost at plus USD11 level, which included more than an odd USD2 because of the inventory gain.
"Compared to that, in this quarter, it should be somewhere around USD 9-USD9.5. But because of inventory gain, last quarter's refining margin seems to be higher than this quarter's refining margin. I think that prima facie, it should be somewhere around USD9-USD9.5," says Mazumdar.
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